Politics of Poverty

A Valentine to Big Oil

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President Donald Trump speaks after signing H.J. Res. 41 in the Oval Office of the White House on February 14, 2017 in Washington, DC. The resolution nullifies a rule in the Dodd-Frank Act that "requires resource extraction issuers to disclose payments made to governments for the commercial development of oil, natural gas, or minerals." Also pictured are House Speaker Paul Ryan (R-WI) (L) and Rep. Peter King (R-NY) (2nd R). (Photo: Olivier Douliery-Pool/Getty Images)

In gift to dictators, Trump signs law rolling back anti-corruption regulation.

As scandal swirls around the White House, President Trump on Valentine’s Day signed his first significant piece of legislation. His choice? A big gift to Exxon, the oil industry, and corrupt officials in oil-rich countries around the world.

“In what Senator Sherrod Brown (D-OH) called the “Kleptocrat Relief Act,” Republicans in Congress used the obscure Congressional Review Act to get rid of a Securities and Exchange Commission rule that implements a bipartisan law requiring oil, gas and mining companies to disclose their payments to the US and foreign governments.”

Halting implementation of this law is a Valentine’s Day gift to Exxon – whose CEO Rex Tillerson was confirmed shortly before Congress took action and who personally lobbied against implementation – and oil companies who fought for secrecy. Trump’s move will now allow secret payments to Russia – a big business opportunity for Exxon should US sanctions be lifted – and other oil-rich authoritarian regimes. Dictators around the world must be rejoicing.

While implementation of the rule would not cause competitive harm to US companies – the vast majority of US competitors are covered and many are already disclosing under laws in 30 countries. The repeal of these safeguards will harm US security and hurt investors and communities struggling to hold governments accountable for spending resource wealth. As the New York Times wrote in an editorial, “By requiring companies in extraction industries like oil and gas to disclose payments to foreign governments, [the rule] aimed to combat corruption. The American oil industry has said such disclosure would put it at a competitive disadvantage. That’s ridiculous. Many other countries have similar rules.”

Oxfam America strongly condemns this move by Trump and his GOP allies in Congress. “Today, President Trump is signing his name to a bill with only one clear purpose: to make it easier to get away with corruption,” said my colleague Isabel Munilla in our press reaction.  “In doing so, President Trump is turning his back on people all around the world who have clamored for American leadership to stand up for democratic values, transparency and good governance. Signing this bill is a stain on America’s reputation around the world.”

While oil companies fought to get rid of US implementation of its transparency law, it pointed to a voluntary initiative, the Extractive Industries Transparency Initiative, as its preferred approach. Even there, oil companies in the US are refusing to disclose their taxes paid to the US government and US Interior Department staff have muzzled civil society members trying to speak out. Civil society members have called on the American Petroleum Institute – which supported the GOP and Trump moves to repeal the anti-corruption rule – to be removed from the initiative for violating its terms of reference.

The US once led on oil and mining transparency, but Trump’s move sends the US backward. The good news is that foreign laws are still in place and producing data, and the EU says it won’t back down from its law. The world’s largest mining companies, as well as Canadian mining companies and their associations, also see no problem and are moving ahead. In the US, the law requiring this disclosure is still on the books and Oxfam will continue to fight alongside the Publish What You Pay US coalition for its strong implementation. Even some oil companies such as Shell recognize that the tide has firmly turned in the favor of transparency. Shell’s CEO said recently that, “The trend that we have with access to information… we will have to live with that. I don’t think any single political system can turn that around.”

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